Oil and gas companies plan to increase their capital expenditure budgets in 2023 due to gains in crude oil prices, executives said in a recent Dallas Federal Reserve’s energy survey.
The majority of executives said their companies will increase their capital spending next year compared with 2022.
Management from 148 oil and gas companies responded to this question in the survey that was conducted between Dec. 7 to 15 with 39% of executives who said the amount of capital spending would rise slightly. Another 25% estimate a significant increase while only 22% said spending in 2023 would mirror 2022 levels. Only 14% of executives said their companies expect to lower spending in 2023.
The rebound in crude oil prices occurred after the invasion of Ukraine by Russia, Moscow’s plan to lower its output of crude oil due to the price cap instituted by the G7 countries on its exports and OPEC+ countries maintaning its production cuts.
Exploration and production companies said they expect the price of West Texas Intermediate or WTI, the U.S. benchmark for oil prices, on average to be priced at $73 a barrel.
The higher crude oil price was one factor used for determining the budget for capital expenditures next year. The median price of oil was $75 per barrel.
In 2022, executives estimated that the price of oil would sell for $64 a barrel.
Crude oil prices have been trading lower for several years. In 2019 and 2020, oil company executives priced oil at $54 a barrel and lowered it…
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